Ask the trade: The impact of the pound’s fall on bike prices & stock fears, post-October

In the second part of our Ask The Trade questions on Brexit (read part one here), we quiz bike shops on the tangible effects of the vote, like the weakness of the pound impacting on prices, as well as how distributors have allayed fears on stocks post withdrawal.

What about prices? The pound has fallen against the Euro and Dollar since June 2016 – has that driven up the prices you’ve been able to offer your customers over the past three years?

Neil Holman, George Hall Cycles
We have put our prices up as the suppliers have put theirs up. We put our workshop labour prices up last year by on average 10%. What was funny was when the Brexit announcement happened and the pound fell through the floor, my online sales to the UK rose but my online sales to the world decreased but 30%. You would have thought it would have been the opposite way around, with the pound being weak buying from the UK would have been cheaper for everyone else.

Paul Lynn, Mountain Mania Cycles
We have seen very marginal price increases but possibly more impacted by suppliers trying to keep the prices low since the recession and raising them more during 2018 and with the impact on import duties in the later part of 2018, but that was nothing to do with Brexit. Where we have seen price increases we have seen the spec of the bikes increase offering better value for money.

John Hamlen, Flag Bikes 
Yes. We have only survived by not being shy about immediately passing all distributor RRP price rises on to our customers. We love our customers but are not a charity and need to stay afloat to continue serving those customers. What is more of a problem is the – admittedly rare – cases where distributors raised our wholesale prices – citing Brexit – but kept the RRP prices unchanged!

Scott Snaith, 50cycles 
I would not say that the euro to sterling exchange value has made any difference to profitability of selling bikes. What has caused a problem is the uncertainty in the market which has meant over winter everyone is bargain watching which has made discounting more of a problem.

This results in lower margins, which is far more damaging than a few percentage points difference on the exchange rate. I think the pound is holding up quite nicely and if we were to leave the EU the strength of the pound would be reflected as net importers with free trade in place worldwide.

Have your distribution partners offered assurances about supply of stock in the aftermath of Brexit?  Is not, should they? Is product supply something you’re concerned about?

Neil Holman, George Hall Cycles
No, I am not concerned. Yes, some of our suppliers have assured us. I am sure to start with there will be teething problems but if the trade has any kind of sense, dealers will help out other dealers. There is a lot of stagnant stock out there that dealers can’t shift because this trade has been so overfed since 2012. It would actually do us a lot of good if things started to become in short supply.

Paul Lynn, Mountain Mania Cycles
I have no immediate concerns on product supply. I am sure suppliers have taken a view and that we support any minor impact should it arise.

John Hamlen, Flag Bikes
No, they haven’t. Perhaps it is something I should be concerned about, but it is quite a long way down the list. Since February, and for other reasons, we have been working hard to improve our diversity of supply. This should have the side effect of mitigating post-Brexit supply issues.

Scott Snaith, 50cycles
We work very closely with our Basque counterparts to ensure that our supply chain will be unaffected, if not improved, as we align our strategies to enable a more satisfactory customer experience on lead times of key selling models. This is our ultimate goal whether we are in or out of the EU this year or next.

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